companies act part 2

8/14/2019 Companies Act Part 2

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Companies Act Part II 1

WELCOME TO

INDIAN COMPANIES ACTPART II




PROCEDURE FOR

INCORPORATION OF A COMPANY

For a company to be incorporated, itmust be registered with the“Registrar Of Companies” (ROC).

After the company is registered, itreceives a “Certificate Of Incorporation” after which the




R i tr ti n f th

Documents to be filed with ROC

2. The Memorandum of Association

3. The Articles Of Association

4. An agreement, if any, which the company proposes to

enter into with any individual for appointment as itsmanaging director or whole-time director or manager.

5. *A statutory declaration in Form 1 that therequirements of the Companies Act have beencomplied with in respect of the registration of thecompany and matters precedent and incidental thereto.

* [by a practising Advocate, of a High Court or a companysecretary or Chartered Accountant in whole-time practiceOR




Additional Documents(In case of a Public Company)

• Written consent of directors in Form29 to agree to act as directors

• The complete address of theregistered office of the company inForm 18

• Details of the directors, managing

director and manager the companyin Form 32.




Memorandum of Association

It is the basic document which contains

3. The objectives of the company.4. The business activity (ies) the

company is authorised to undertake.5. Location of the Registered Office.

6. Capital structure of the Company.




The Articles of

Contains:

3. The rules and regulations for theinternal administration of thecompany.

4. It includes bye laws relating to themanagement of the company.




Certificate of Incorporation

Issued by the Registrar of Companiesunder his seal and signature after

the afore mentioned documents aresubmitted to him and

the same were scrutinized by theRoC.




Notice of Registered Office

After obtaining the Certificate of

Incorporation,the Company Secretary must sendthe notice

of registered address of the company, if it was not sent earlier,

within 30 days of registration.




Commercial Operations

1.A “Private Company” is eligible totransact business, on obtaining theincorporation certificate, The private

company is now incorporated.2.A “Public Company”, however cannot

transact business unless it obtains a

‘trading certificate‘(also known as “Certificate of Commencement of

Business”)




Management of a Company

A company being a body corporateis managed and run by a Board

The Board is comprised of Directors

Directors are appointed under themandate of the members or shareholders




Definition of "member"

According to Section 41 of the Act,

(1) The subscribers of the memorandum of acompany shall be deemed to have agreed tobecome members of a company, and on its

registration, shall be entered as members in itsregister of members.

2) Every other person who agrees in writing tobecome a member of a company and whosename is entered in its register of members,

shall be a member of the company.3) Every person holding equity share capital of acompany and whose name is entered asbeneficial owner in the records of thede ositor shall be deemed to be a member of




Minimum number of Directors(Sec. 252)

1 Every public company shall have atleast

three directors:

2.A public company having,-

(a) a paid-up capital of five crorerupees or more;(b) one thousand or more smallshareholders,




Minimum number of

3. Every [other] company shall have atleast two directors.

[Explanation.-For the purpose of thissub-section "small shareholder" means

a shareholder holding shares of nominalvalue of twenty thousand rupees or less in a public company]




THE “BOARD”

The directors of a companycollectively are referred to as the

"Board of directors" or "Board". Only individuals to be directors

• Section 253 lays that no body

corporate, association or firm shallbe appointed director of a company,and only an individual shall be so




Appointment of Directors

Proportion of those who are to retireby rotation

Unless all Directors to retire, asprovided for in the

Articles of Association, at least two

thirds of the totalnumber directors of a public companyshall be




Nominated Directors

Where the Articles of the Company soauthorize

A financial Institution which hasadvanced huge

loans to a company, may induct aDIRECTOR

on the board of the Company.




Management

The affairs of a company are managedby the

Board of Directors.

It is customary that a ManagingDirector is

appointed to head the management of a

company.




Managing Director

A person entrusted with any powers of the

Management (Section 226)

Exercises some or all powers andfunctions of

the Directors in managing the

company, as delegated by virtue of an

agreement,




How a MD is appointed?

1. By an agreement with the company

2. By the Resolution of Board of Directors

3. By the Resolution passed by thecompany

4. at the Annual General Meeting

5. By the Memorandum of Association

6. By the Articles of Association




Day to day Management

he Board of Directors or with theapproval of

the Board, the Managing Director or anyother

Director,can be vested with the powers to appoint

such

Officers and employees as necessaryfor the functions, business and activities

of the




End of Part II

THANK

YOU!